How DGGF ‘Financing local SMEs’ takes Climate Action
The Dutch Good Growth Fund (DGGF) is taking further steps to contribute to the global fight against climate change and its consequences. In line with other European Development Finance Institutions, we have updated our exclusion list to incorporate the most harmful fossil fuel related activities.
Moreover, we are working to assist our partners via technical assistance to shape their own climate-related actions and support them to achieve their goals.
Global climate crisis
The world is facing a global climate crisis. As evidenced by the latest AR6 IPCC Reports, the effects of climate change will come sooner and more severely than previously anticipated. Worryingly, these consequences will likely be felt hardest by the most vulnerable communities on our planet. Individuals, companies, and governments have a responsibility to reduce their carbon footprint and ensure resilience to those climate effects which cannot be avoided.
Sustainable Development Goals
The Dutch government has committed to both the Paris Agreement in 2015 and Glasgow Climate Pact in 2021, with the goal of forming a global coalition to limit global warming to 1,5 degrees Celsius above pre-industrial levels. Moreover, all United Nations Member States adopted the Sustainable Development Goals in 2015 and with that committed to SDG 13: to take urgent action to combat climate change and its impacts.
DGGF will continue to monitor, develop, and adapt the highest climate-related standards in development finance to further shape our commitments during this crisis, within the context of our mandate.
Mitigate climate impact
As a fund of the Dutch Ministry of Foreign Affairs and an engaged member of the global climate action community, DGGF is committed to support our partners mitigate their climate impact and adapt to the consequences of climate change. This goes hand in hand with our goal to promote entrepreneurship in frontier markets. DGGF will continue to monitor, develop, and adapt the highest climate-related standards in development finance to further shape our commitments during this crisis, within the context of our mandate.
As a first step, we will avoid investing in the most harmful activities. In line with other European Development Finance Institutions, DGGF will adopt the Harmonised EDFI Fossil Fuel exclusion list. It contains activities such as coal and oil exploration, standalone gas production, crude oil pipelines and oil refineries. We have asked our partners to update their exclusion lists accordingly.
Cooperation = key to succesful climate action
In addition, we are engaging with our partners to identify potential needs for technical assistance around climate mitigation and adaptation. This enables us to tailor our offering to the needs of our investees, thereby maximising our value added. Examples of such technical assistance may include developing a climate strategy, understanding the investee’s impact or vulnerabilities, or adopting specific mitigation and/or adaptation measures in the investee’s portfolio.
Cooperation is the key to successful climate action. Therefore, we are committed to making this a joint effort with our partners, but also with other stakeholders. If you have valuable suggestions or questions, please feel free to reach out.